Financial Frictions, Market Access and Technology Adoption: Experimental Evidence from India

Last registered on December 20, 2023
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Pre-Trial

Trial Information

General Information

Title
Financial Frictions, Market Access and Technology Adoption: Experimental Evidence from India
RCT ID
AEARCTR-0012671
Initial registration date
December 14, 2023

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
December 20, 2023, 2:04 PM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
India
Region

Primary Investigator

Name
Liang Bai
Affiliation
King's College London
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Camille Boudot-Reddy
PI Affiliation
Birkbeck, University of London
Contact Investigator

Additional Trial Information

Status
On going
Start date
2019-01-01
End date
2024-05-31
Keywords
Agriculture, Finance & Microfinance
Additional Keywords
Market Access, Technology Adoption
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Improving agricultural productivity remains a central challenge in many developing countries. Working together with a local NGO in northern India, this project seeks to study obstacles to the adoption of a novel vertical farming model, which enables the simultaneous cultivation of multiple crops. Despite its potential to significantly boost farm incomes, the baseline rate of adoption is low. An experiment over three years is designed to study the roles of financial frictions, as well as market access, in shaping adoption decisions, both in the cross section and over time.
External Link(s)

Registration Citation

Citation
Bai, Liang and Camille Boudot-Reddy. 2023. "Financial Frictions, Market Access and Technology Adoption: Experimental Evidence from India." AEA RCT Registry. December 20. https://doi.org/10.1257/rct.12671-1.0
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Experimental Details

Interventions

Intervention(s)
Intervention (Hidden)
The experiment is designed to study the roles of: i) financial frictions and ii) market access in shaping households' decisions regarding the adoption of the vertical farming model. To this end, we designed two interventions - the first focuses on the input side, targeting credit access; while the second focuses on the output side, targeting market access. We study these interventions both in isolation, and jointly. The control group does not receive either intervention, but does receive information regarding the technology as well as a demonstration plot.

The credit product is provided by a local microfinance institution, designed specifically for agricultural households. The amount ranges between Rs.10,000 and Rs.30,000, sufficient to cover the upfront costs of the vertical farming model. It is repaid over a period of 12 months, with an interest rate of 24.5% APR, paid monthly.

The market access intervention is designed to: i) provide households with up-to-date information on market prices, and ii) lower the cost of bringing their harvest to markets, by coordinating on transportation.
Intervention Start Date
2019-10-01
Intervention End Date
2022-07-30

Primary Outcomes

Primary Outcomes (end points)
Rate of technology adoption; Input use (e.g. hired labour, seeds, fertiliser and pesticide, irrigation, machinery); Value of harvest; Farm profit.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The experiment is designed to study the roles of: i) financial frictions and ii) market access in shaping households' decisions regarding the adoption of the vertical farming model. To this end, we designed two interventions - the first focuses on the input side, targeting credit access; while the second focuses on the output side, targeting market access. We study these interventions both in isolation, and jointly. The control group does not receive either intervention, but does receive information regarding the technology as well as a demonstration plot.
Experimental Design Details
The credit product is provided by a local microfinance institution, designed specifically for agricultural households. The amount ranges between Rs.10,000 and Rs.30,000, sufficient to cover the upfront costs of the vertical farming model. It is repaid over a period of 12 months, with an interest rate of 24.5% APR, paid monthly.

The market access intervention is designed to: i) provide households with up-to-date information on market prices, and ii) lower the cost of bringing their harvest to markets, by coordinating on transportation.
Randomization Method
Done in office by computer.
Randomization Unit
Village (Gram Panchayat)
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
40 Villages (GPs).
Sample size: planned number of observations
Approximately 4,000 households (100 households per village).
Sample size (or number of clusters) by treatment arms
10 villages control, 10 villages credit access,10 villages market access, 10 villages both treatment.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IFMR Human Subjects Committee
IRB Approval Date
2019-05-25
IRB Approval Number
7107
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials